Basal cell carcinoma (BCC) is the most common form of human cancer. Insight into its development comes from elucidation of the hedgehog signaling pathway, originally described in Drosophila and now recognized as being of major importance in vertebrate development. In adult animals, activation of the hedgehog pathway is associated with tumorigenesis. The pathway involves a soluble protein, Sonic hedgehog (SHh), and two receptors, Patched (Ptc) and Smoothened (Smo). Ptc is an integral membrane protein that normally forms a complex with the seven- span transmembrane protein Smo, keeping it in an inactive state. The binding of SHh to Ptc is thought to prevent normal inhibition of Smo and thereby initiate a signaling cascade. Mutations in the human Patched gene (Ptc) that prevent it from inhibiting Smo lead to the hereditary disease, basal cell nevus syndrome, and are also a cause of sporadic BCCs initiated by UV exposure. Activating mutations in Smo have also been identified in sporadic BCCs. The mechanism by which Smo begins its signaling cascade is unknown, but structurally it resembles a G protein- coupled receptor. Indirect evidence suggests that it associates with a Gai-class subunit. Since inappropriate activation of Smo is the key transforming event in BCC, pharmacological inhibition of Smo could provide an effective treatment for this type of cancer. We propose to use the frog melanophore assay to identify novel antagonists of Smo, using synthetic peptides as ligands. Work is in progress to construct a combinatorial library of random sequence 11-amino acid peptides on polystyrene beads. The completed library will comprise approximately 1 x 10/7 distinct peptide sequences. The melanophore bioassay is a powerful and rapid method for observing activation of G protein-coupled receptors and represents one of the few bioassays available to study the Gai-linked class of receptors.